Rising Crude Oil Prices Push Up Pump Prices for Consumers

At $2.58, the national gas price is four cents more expensive on the week. Across the country, motorists in 47 states and Washington, D.C. have seen pump prices increase as much as 9 cents with the Great Lakes, Central, South and Southeastern states seeing the largest increases. The Energy Information Administration (EIA) reports an increase on the week in gasoline demand and inventories.

“Compared to the first few weeks of January last year, consumer gasoline demand is noticeably higher, which is surprising giving the frigid winter much of the country has experienced this month,” said Jeanette Casselano. “But demand isn’t the only factor driving prices up. Crude oil has been selling at very expensive rates the past few months. Those higher market prices are now trickling over to consumers at the pump.”

Nationally, gas prices are 10 cents more expensive than one month ago and 30 cents more than one year ago. On the month, Iowa (+18 cents) has seen the largest increase. Compared to one year ago, motorists in Indiana (+52 cents) top the list for the largest increase, while New Mexico (+15 cents) has seen the smallest increase in the country.

Drivers in the West Coast region are buying gasoline at some of the highest prices in the nation. Six of the most expensive markets in the country are found in this region: Hawaii ($3.38), California ($3.28), Alaska ($3.03), Washington ($2.96), Oregon ($2.85) and Nevada ($2.71). On the week, California (+8 cents) saw the region’s largest increase, while Alaska (-5 cents) saw the largest decrease.

Last week, total refinery utilization dropped to 88.6 percent from 96.9 percent the previous week due to refineries undertaking planned maintenance, according to EIA’s latest weekly petroleum status report. As a result, inventories of gasoline dropped slightly to 34.6 million bbl, which is 3.4 million bbl higher than last year’s level at the same time.

Great Lakes and Central

Gas prices are as much as 9 cents more expensive on the week in the Great Lakes and Central states. Five states land on this week’s top 10 states with the largest increases list: North Dakota (+9 cents), Missouri (+8 cents), Indiana (+6 cents), Kansas (+6 cents), and Minnesota (+6 cents). Though it claims the smallest increase on the week, Michigan (+2 cents) touts one of the most expensive gas price averages in the region at $2.62. Illinois has the most expensive ($2.63), while Missouri ($2.37) sells the region’s cheapest gas.

The EIA reports that the region is sitting on 55 million bbl, the highest gasoline inventory for the Great Lakes and Central states since early June 2017. On the week, inventories built by1.8 million bbl.

South and Southeast

Motorists in the South and Southeast are seeing higher than average gas prices for this time of year. Four states are paying at least 25-cents more compared to January 2017: Georgia (+31 cents), Oklahoma (+29 cents), South Carolina (+29 cents), Alabama (+28 cents), Mississippi (+27 cents), Arkansas (+26 cents) and Louisiana (+25 cents).

Despite the year-over-year increases, the region is home to some of the cheapest gas prices in the country: South Carolina ($2.33), Texas ($2.34), Alabama ($2.35), Mississippi ($2.36), New Mexico ($2.36), Arkansas ($2.37) and Louisiana ($2.40). This is the first time since August 2017 that South Carolina has claimed the cheapest gas in the country and region.

Gasoline inventories in the region dipped by 814,000 bbl on the week. Total inventories measure at 83.5 million bbl, which is 2.5 million bbl below levels this time last year, according to the EIA.

Mid-Atlantic and Northeast

Four states in the region have gas prices that are 5 cents more expensive on the week: Virginia ($2.42), New Jersey ($2.68), Maine ($2.63) and New York ($2.74). Of these states, New York is one of the most expensive in the region and the country, along with Pennsylvania ($2.86), Washington, D.C. ($2.79) and Connecticut ($2.72).

Compared to one month ago, gas prices in the Mid-Atlantic and Northeast region are 6 to 15 cents more expensive. Virginia (+15 cents), Tennessee (+15 cents), New Jersey (+14 cents), Delaware (+14 cents) and Pennsylvania (+14 cents) lead the region with the largest month-over-month changes.

The region saw the largest addition of gasoline inventories with a 2.3 million bbl add. The 63 million bbl total sits eight million bbl below EIA’s report from the same week last year.

Rockies

Utah (-2 cents) and Idaho (-1 cent) were among the minority of states this week in the country and the region to see gas price decreases. Colorado (+4 cents) and Montana (+2 cent) saw small increases, while Wyoming remained stable. Montana ($2.60) and Idaho ($2.57) tout the most expensive gas in the region this week. Gas averages are about 15 cents cheaper in Wyoming ($2.45).

For a second week, gasoline inventories took a small draw. However, levels continue to remain above 7 million bbl.

Oil market dynamics

At the close of Friday’s formal trading session on the NYMEX, WTI increased 63 cents to settle at $66.14. Moving into this week, oil prices are likely to continue trending higher. EIA’s latest weekly report highlights that U.S. crude inventories reached their lowest level in nearly three years at 411.6 million barrels.

Crude production in the U.S. continues to inch closer to a new 10 million b/d record, which most market analysts expect the U.S. to hit sometime this year. According to the EIA, crude output grew by 128,000 b/d, reaching 9.88 million b/d. Market observers remain cautiously optimistic about this year due to worries about growing production rates from large producers who are not participating in the OPEC production agreement. These producers, such as the U.S., could thwart OPEC efforts to rebalance supply.

Last week’s U.S. oil rig count from Baker Hughes, Inc. showed that the number of active oil rigs increased by 12, raising the total to 759. For drivers, the crude price rally could mean even higher pump prices in the near future.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile